China sales slump, USA back on top in global art market

Chinese spending on art shrank by almost a quarter in 2012, signalling an end to the two year growth spurt that took China to the top of the global art market.

“The TEFAF Art Market Report 2013 – The Global Art Market” a report compiled by art economist Dr Clare McAndrew and released on 14 March 2013, states that the Chinese art market contracted by 24 percent in 2012, allowing the USA to resume its position as the world’s largest market for art.

Auction houses across China experienced a reversal of fortune in 2012, following two years of growth.

Figures for 2012 show that China, with 25 percent global market share, has reverted to second place behind the United States, with its 33 percent share. China was followed closely by the United Kingdom, which came in third with 23 percent.

The main reasons for the deceleration in growth were both demand factors (including a slowdown in economic growth and continuing liquidity constraints) and a reduced amount of high quality, high priced works coming onto the market. Many art funds and other speculative investors also reduced their participation in the market during the year.

Post-War and contemporary art makes up 43 percent share of the market, the largest fine art sector. It recorded the auction sales of USD5.8 billion (4.5 billion euros), an increase of 5 percent.

blue-chip galleries and artworks performed the best in 2012, with the strongest sales recorded by well-known artists at the top end of the market.

The TEFAF Art Market Report 2013, which puts USA at the top of the art market once more.

McAndrew’s description of a faltering Chinese market echoed Artprice’s annual market report, released in October 2012, which claimed that “monotony and a lack of highlights” (PDF download) characterised the Chinese art auction market in 2012.

Georgina Adam, writing in the Financial Times in February 2013, drew attention to falling sales at China’s top two auction houses: Poly Auctions reported a fall in sales from USD1.9bn in 2011 to USD965m in 2012, and China Guardian saw a drop from USD1.8bn to USD820m in the same period.

The dynamics of its wealth continue to show great potential for future growth in art sales, with a rapidly rising number of wealthy consumers and a growing middle class. This, combined with a rich cultural heritage of art and antiques, has produced a huge domestic market and ended the duopoly held by London and New York for over fifty years.

Jing Daily, reporting in January 2013, also painted a cautiously optimistic picture of the Chinese art market in 2013, acknowledging that although 2012 had been more “complex and challenging” than 2011, when the Chinese art market grew to USD33.8 billion (210.8 billion yuan), there would be fewer speculators and more serious collectors and market maturation in the coming twelve months.